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    In response to the Supreme Court judgment
    16.09.2010

    In response to the Supreme Court judgment

    The bill of law announced by the minister for economic affairs, following the judgment passed by the Supreme Court of Iceland today, has reduced some of the uncertainty over the debts of individual borrowers. The prolonged state of uncertainty has caused the customers of the Bank considerable discomfort and has limited the Bank’s capacity to resolve the debts of individual borrowers and households.

    Following the introduction of this legislation it will become clearer in more detail how it will affect customers of Arion Bank. The Bank wishes to point out, however, that the Supreme Court judgment today concerns car loans and the Bank does not have any such loans in its accounts.

    Arion Bank is on a firm footing

    In recent months Arion Bank has worked with the Icelandic Financial Supervisory Authority to assess the possible impact of loans in foreign currency on the Bank’s financial position. The Bank believes that even if the proposed bill is passed into law it will have a limited effect. The Bank will continue to meet the requirements of the Financial Supervisory Authority of a 16% capital ratio and 20% liquidity ratio.


    Borrowers with foreign currency property loans will still be given the option of paying ISK 5,000 for every ISK 1 million borrowed

    Until the bill is passed into law by the Icelandic parliament, Arion Bank will continue to offer its customers with property loans in foreign currencies and with a mortgage in a property, the option of paying ISK 5,000 for every ISK 1 million originally borrowed.

    The Bank also wishes to confirm that those customers of the Bank who have already taken advantage of the Bank’s solutions will still be entitled to benefit from today’s decisions. Furthermore, the Bank will hold no forced sales of residential property this year.

    Arion Bank would like to thank its customers for the patience they have shown during this period of uncertainty, which has lasted far too long. The Bank hopes to soon be able to offer a clear strategy to help create solutions to these issues which are both acceptable to the customers and the Bank.